Manila: The Supreme Court (SC) has ruled that the Construction Industry Arbitration Commission (CIAC) possesses the authority to determine the recipients of a judgment award granted to a corporation that has been dissolved.

According to Philippines News Agency, the SC’s Second Division issued a 21-page decision, made available online on Tuesday, supporting CIAC’s directive that instructed the former Philippine Commercial and International Bank (PCIB), now Banco De Oro Unibank, Inc. (BDO), to disburse PHP8.7 million with interest to individuals listed as stockholders, or their heirs or representatives, of the dissolved William Golangco Construction Corporation.

The case originated from a construction project involving PCIB’s tower extension. Upon its completion, the building began to show signs of deterioration, leading PCIB to engage another contractor for necessary repairs. Subsequently, PCIB initiated an arbitration case through CIAC to recuperate the repair expenses, while the corporation filed a counterclaim seeking adjustments in material costs.

CIAC adjudicated both claims. However, prior to the enforcement of the decision, the corporation informed CIAC of its dissolution following the expiration of its corporate term. It also provided a list of its former stockholders, their respective shares, and the heirs or representatives entitled to receive the outstanding amount from BDO.

CIAC subsequently mandated BDO to compensate these individuals. BDO contested this directive, arguing that CIAC lacked the jurisdiction to identify the heirs of the corporation’s deceased stockholders entitled to the judgment award.

In its ruling against BDO, the SC confirmed that under Executive Order No. 1008, known as the Construction Industry Arbitration Law, CIAC holds the authority to settle disputes pertaining to Philippine construction contracts when the involved parties have agreed to arbitration. Furthermore, the Revised Rules of Procedure Governing Construction Arbitration endows CIAC with broad authority to issue orders necessary for the enforcement of its awards, including the identification of eligible recipients.

The SC noted, ‘In this case, since the Corporation’s assets had already been distributed to its stockholders or their heirs, CIAC had the authority to determine the individuals who should receive the monetary award and how much each person should get.’ It also highlighted that BDO had already made partial payments to some of the identified individuals, indicating its acknowledgment of CIAC’s order.

Consequently, the SC instructed BDO to remit the remaining amount to the individuals identified by CIAC, deducting the already made partial payments, along with the applicable interest.